Investing can be scary. You’re taking the money you worked hard for (or even scarier that someone else worked for) and putting it to work to hopefully not lose any, and ideally earn money on top of it.
Is it really as scary as it sounds? Not if you have multiple exit strategies.
I was raised by an amazing loving family with great jobs and a strong work ethic. My dad worked in oil and gas up until his retirement, and my mom, after raising myself and my 2 siblings, continues to work in oil and gas as well. I was very fortunate to never experience financial struggles. But, from the ripe age of 14, I was encouraged to go to work so that I could build a strong work ethic as well. I was taught from a young age to set aside a percentage of every paycheque to stash in my savings. I enjoyed watching it grow.
I have never in my life financed a car, nor have I had a penny of debt. I am not saying that to brag, but rather to show that I was taught to live far beyond my means. If I couldn’t buy a car in cash, that means I couldn’t afford it. This is something I am so grateful to have learned because I feel living beyond my means would have significantly hindered my investing potential.
Although my dad is very active in the stock market, my parents have never invested in real estate. Not to say they weren’t interested, but up to this point they haven’t pulled the trigger. One of my goals in this journey is to actually inspire my parents to finally obtain a rental property.
So why is this all worth mentioning? Because I feel it really demonstrates where my mindset came from going into this new world of real estate investing. I have the background of being great with money, good at saving, and not spending beyond my means. But, I did not have any teachings related to investing or risk-taking. Putting your money to work for you rather than letting it sit within a savings account is an entirely new concept for me. But it makes so much sense. Why would I let my money sit in a savings account battling deflation when I could invest in an appreciating asset, and stretch that money out to duplicate.
When I shifted my mindset in that way, my world was turned upside down. Don’t get me wrong, I think savings accounts are important too. Having reserves is necessary, as is having some sort of retirement plan. But now, I think, how can I grow this money. How can I best utilize it.
Honestly, the biggest thing for me (coming from reading Rich Dad, Poor Dad) was understanding the concept of good vs. bad debt. Previously, all debt was bad. I should avoid it at all costs. But when I learned I could borrow money with very little of my own upfront (a mortgage), and use that as an instrument to earn a profit, I wanted to jump all over that.
Purchasing my first property, I wasn’t too scared of what could go wrong. If we make mistakes, we take that lesson to the next one and prevent it from happening. If we can’t get it rented out right away, we househack for a little longer. If something happens with tenants in, we have a reserve and we can address it.
We realized that real estate investing is something you can read and read about, but until you actually experience it first hand, it’s impossible to be prepared for everything. That’s why I encourage you to dive in. Do your research, know your numbers, but be aware that if you wait forever to feel ready, you may never pull the trigger.